COMPLICATED CASE.

Poverty Bay Herald, Volume L, Issue 16607, 10 December 1924, Page 2

COMPLICATED CASE.

NATIVES, AND MORTGAGER

CLAIM AGAINST SOLICITOR

After several adjournments the action in which Matanga, Taihuka, as trustee lor a number of other natives, proceeded against Fergus Gale Dunlop, and his wife, Marjorie Helen Dunlop, for a sum of £3343'and the transfer of certain mortgages, came before His Honor Mr. Justice Reed at the Supreme Court this

morning. Mr. L. T. Barnard, instructed by Mr. A. Whitehead, appeared for the plaintill-, and) Mr. T. A. Coleman for Airs. Dunlop. Mr: Barnard said that in 1916, the defendant was instructed to act for a number of natives in connection with the obtaining of a refund of moneys concerned' in a. transaction % of 1887. A compromise was effected arid thejpresent .action commenced ‘ with a deed of covenant, drawn up by the defendant in favor of the parties represented by the plaintiff. The settlement involved payment of £2500 in cash, and a. mortgage for J36CCO. The defendant continued to act as solicitor for the trustees, and also for the beneficiaries, and from time to time collected and disbursed interest. On March 5, 1923 the defendant had prepared a. transfer of the mortgage to his wife, the second defendant. In May Mr. Dunlop procured his wife’s signature to a sub-mortgage of £2400 to n, Mr. Bates. In his statement, of defence, Mr. Dunlop said the transfer of the mortgage was made to him in payment of the heavy costs incurred in acting for the plaintiffs. These costs w§re incurred by varied sets of beneficiaries, and obviously it was incorrect for the beneficiaries as a whole to be debited with legal costs of some of them only. Clearly such an action was a breach of trust. It was a remarkable thing that a solicitor well versed in native procedure should have procured the transfer of a mortgage not to himself, but to his wife. The only defence to such un action would he for the defendant to show that the transfer of the security had been made by the trustees with a lull knowledge of its effect, and with the consent of the whole of the beneficiaries. Only two trustees were now living, and they would be called to show the circumstances under which I he transfer was signed. The document was interpreted by an employee of the defendant, ami the trustees .supposed they were signing a document which would not affect their own interest or that of the beneficiaries. They had signed under a complete misapprehension of the effect of the document.. The statement of defence contended that the beneficiaries had agreed to the execution of the document, but evidence would be given by a number of them that they had never been consulted. The most remarkable statement of the defence, however, was the assertion tlyit the beneficiaries, individually and collectively, were indebted to the defendant for substantial legal costs, which were charged against the trust. Since kite work of the trust had been taken out of Mr. Dunlop's hands he had been repeatedly asked* for a, statement of his costs, but this had) never been received. One of the complications of the case was that, two of the beneficiaries had sold their interest in the £6COO mortgages to two Europeans, Mr. Irvine, and Dr. Kahlenberg, but this, it was contended, 1 did not affect the principle Hint the security should be kept intact for the 'benefit, of the trust.

Ma iio\Tnwhinrangi, one of the pin in - lift's in tlii> action, .null :i trustee in (lie mortgage -of £(100(1 given hv tin* \Vi Here estate, in the plaintiff, staled thnl in tin* parly part of 102.1 he attended n poiil'pi'piipp in Mr. Dunlop’s office. A document was produced, nml they were told if was to divert the interest from the Kerekere properly |o Mr.'Dunlop in payment of his costs. Kerekere was one of the bcueficarics in Itip trust, but thorp were many bcnPlicnrips oilier than members of ihe Kerekere family. After the document was read over, witness signed il. He had since learned that the document effected a transfer of the £OOOO mortgage to Mrs Dunlop, Imi af Ihe lime he signed il he did nol know lliis was ihe elfeel of il. Had lie known this was Ihe elfeel of Hie document he would never have ‘signed il.

'l’o Mr. Dunlop, the witness said he (Mr. Dunlop) had acted as his solicitor for a number of years, including the Mangatu ease, which involved 100,000 acres, valued at £lO an acre. Witness’s people had received about SOOtl acres of the property. This case had involved actions in several courts, and there would be other'litigation in which Mr. Dunlop had appeared for members of his family. Mr Dunlop: As a result of actions in which I have been engaged your people have recovered property valued at from .til 00,000 to £150,000?—It may be that much. I don’t know the value.

After further questioning ns to the work he lmd done for various natives, His Honor interrupted Mr. Dunlop and said he had given him a lot of latitude on a really immaterial point. He was quite satisfied that Mr. Dunlop had done a great deal of work for the witness and other natives.

Mr. Dunlop: T, was just showing your Honor that the plaintiffs were indebted to me for costs. His Honor: Yes. Of course you might, have rendered an account in the ordinary way, and shown it had not been paid. Mr. Dunlop: T took a transfer of Ihe mortgage instead. Further questioned, \vitness said he had only attended one conference in connection with the transfer of the document, and on that occasion the elders of ihe family had riot been present and consented in the transfer of Ihe mortgage. Witness himself had not know that he was transferring flip property. Mutanga Taihuka, another of the plaintiffs, and trustee for the mortgage, stated that he had been visited bv Mr. Dunlop and his interpreter, Mr Ferris. He later informed him that there had been a meeting the day before, when it was decided that the interest of the Korekorcs ' from the mortgage was, to go to Mr. Dunlop. Witness asked about the money of the natives other than the Kerekere family, and was assured that the document did not refer to any other interests. Witness was them satisfied and signed the document. When the beneflcaries did not receive their interest he knew there was something wrong, and enquiries were instituted. “We asked Mr. Dunlop about the interest.” the witness added, “and he said ‘inilion/ and we are waiting for il yet.” Continuing, he said lie had not known that he was assigning the mortgage to Mrs. Dunlop. The Court then adjourned until this afternoon.